High court ruling permits
challenge to dues arbitration

California attorneys who are unhappy with the State Bar's dues deduction for non-chargeable expenses cannot be precluded from suing the bar, the California Supreme Court has ruled.

In a unanimous decision, the high court held that an arbitrator's calculation of the so-called "Hudson deduction" does not prevent a First Amendment challenge to the arbitration.

"Limiting members to judicial review of the arbitration decision would violate congressional intent that a [federal civil rights] cause of action be available even to persons who have arbitrated a claim that mandatory dues payments are being used for [ideological] purposes in violation of their First Amendment right to freedom of speech and association," wrote Justice Marvin Baxter in a 34-page opinion.

The case is an outgrowth of the Keller v. State Bar of California litigation, in which the U.S. Supreme Court ruled that the bar may not use mandatory dues for activities unrelated to the regulation of the legal profession.

The bar created an arbitration process to determine what portion of the annual dues can be deducted as "non-chargeable" expenses.

Sacramento deputy attorney general Raymond Brosterhous challenged the 1991 deduction, and although he was awarded an additional refund, he chose not to seek review of the arbitrator's decision. Instead, Brosterhous filed suit in Sacramento Superior Court, claiming the bar violated his First Amendment rights by using mandatory fees for political activities he did not support.

The trial judge threw the case out, but the Third District Court of Appeal ruled that a federal challenge to arbitration was permissible to protect constitutionally guaranteed rights.

The high court agreed.

"Arbitration of members' objections to the manner in which the State Bar calculates the portion of annual dues used for political and ideological purposes is not a permissible substitute for an action for damages and injunction," Baxter wrote.

"We also conclude that [an] action may be brought regardless of whether the member has sought judicial review of the arbitrator's decision."